Project Rehab

As an academic renegade, Tim Gunn pushed Parsons the New School for Design to adopt a businesslike curriculum. Now the star of Project Runway is trying to revive Liz Claiborne as its chief creative officer. Can he "make it work" or is it "auf Wiedersehen" for a once-great American fashion house?

Tim Gunn's right eyebrow is shooting toward the sky like a boomerang. It's the signature gaze, filtered through a pair of rimless glasses perched on his nose, that fans of reality television's Project Runway are used to seeing hurled at aspiring enfants terribles of fashion. But on this chilly morning in December 2006, Gunn's trained eye is on the suited businessman across the table. William McComb had invited Gunn to breakfast at Pastis, a bistro in Manhattan's Meatpacking District where pretty people with expense accounts linger over oeufs and brioches in an ersatz Parisian ambience. Now Gunn was waiting to hear what, exactly, the new CEO of Liz Claiborne Inc. was after.

Gunn had assumed McComb was just another new exec wedging his way into the anarchic and insular world of fashion. Two months earlier, McComb had left his senior post pushing orthopedic devices at Johnson & Johnson; no doubt he was reaching out for advice. But it turned out McComb had a different motive altogether. "I want you to be my first hire," the CEO proposed, nearly knocking the critic's designer socks off.

McComb knew that his $5 billion company had lost its creative juice. He wanted a chief creative officer, not to dictate product design but to put some meat on the bones of an atrophied design culture. The fact that Gunn ran Parsons's prestigious fashion program — the source of a good 70% of the designers on Seventh Avenue, from Anna Sui to Tom Ford — was key. He had a front-row seat to the industry's hottest emerging talent and a Rolodex that could be a serious weapon. What's more, McComb was intrigued by the Parsons turnaround story: Unknown to his TV fans, Gunn had almost single-handedly transformed the school from a hidebound, traditional program into one that bred marketwise designers — just the entrepreneurial mind-set McComb was trying to instill at Liz Claiborne. A marketer to the marrow, he couldn't help but also appreciate that the Bravo breakout star was now a household name, gushed over by everyone from suburban moms to fashion plates like Sarah Jessica Parker. Gunn looked like money.

But Gunn was cautious. After nearly three decades as a college administrator, he had somehow landed on a hit TV show and become a pop-culture phenomenon. He routinely outshone the show's star — supermodel Heidi Klum — with his Victorian vocabulary, perfect posture, and prim Tim-isms ("Make it work!" "Carry on!"). He was in the midst of writing his first book, Tim Gunn: A Guide to Quality, Taste, and Style, and by the fall would have his own fashion-therapy show on Bravo. "I was having the most fun I'd ever had in my life," says Gunn, 54. What's more, he had never worked for a company. "I had the greatest respect for the private sector, but I had never been part of it," he says, from his new office at Liz Claiborne headquarters in New York's Garment District. "The whole prospect of coming here was terrifying."

As it should have been. While Liz Claiborne the woman passed away last summer, Liz Claiborne the brand has been in a deep coma for years. Claiborne pioneered American women's wear in the 1970s; her impeccable designs, paired with her ability to reassess every aspect of the business — from merchandising to point of purchase — led her to become the first female founder of a Fortune 500 company. But by the time she retired in 1989, the company had plateaued. And by late 2006, the once-noble house had devolved into an unwieldy conglomerate that couldn't keep pace with newer, more stylish competitors. When longtime CEO Paul Charron retired, Liz Claiborne's board took a page from LVMH and Gucci, which had successfully imported consumer-products execs — P&G's Antonio Belloni and Unilever's Robert Polet, respectively — and brought in McComb, 45, to make radical changes. "I didn't come here because I love clothes," McComb says. "It's a business."

Whether McComb's hiring of Gunn in March 2007 was an act of desperation or inspiration is still unclear. Liz Claiborne stock is down sharply since McComb — one of the youngest CEOs in the industry — took over, despite his whacking jobs, shuttering brands, and reorganizing what's left. This January, he succeeded in luring another high-profile recruit: Isaac Mizrahi, the designer who jump-started discount mass fashion for Target and boasts his own shows on the Style Network and Oxygen (and even starred in his own one-man off-Broadway show, Les Mizrahi). He will become the Liz Claiborne brand's creative director this summer. With Gunn's help, McComb has also added fashion stalwart John Bartlett to reboot the Claiborne menswear line and acquired the critically acclaimed Narciso Rodriguez. Still, as Lori Holliday Banks, a senior fashion analyst at the Tobe Report, puts it, "There's no room for mistakes when a business is in the position that Liz is in right now." In mid-February, the company announced that earnings would fail to meet expectations, and the stock fell 18% in a day. Gail Zauder of luxury-goods investment bank Elixer Advisers cautions: "They can certainly get the press. But the question is, can they translate it into sales?"

Gunn remembers the first time he saw himself on TV back in 2004. "It was horrifying," he says, sitting cross-legged in Claiborne pin-striped trousers and a matching vest. "It was the night of the Project Runway premier party, and I refused to go. I watched the show at home, alone, peeking out of the sheets of my bed the way I used to watch The Wizard of Oz as a kid."

Gunn is a long way from home. Now a regular on the entertainment circuit with cameos everywhere from Ugly Betty to The Biggest Loser, his corporate beige office is stuffed with souvenirs of his newfound celebrity: a framed photo of him and Oprah, a cover of Entertainment Weekly featuring him and Heidi Klum, a talking Bobblehead — of himself.

Surprisingly, Gunn, who received a degree from Yale in English lit, has never been a fashion designer. His organizational chops and passion for education landed him at Parsons the New School for Design in 1983. In 2000, the longtime chair of the fashion-design school — an untouchable fiefdom due to its success — resigned; Gunn, then an associate dean, was charged with finding a replacement. When he pulled back the curtain, he discovered that the program hadn't evolved during the last half of its 100-year history. "The feeling of the department was, 'It's such a success — the graduates are so famous — don't do anything to it,' " Gunn recalls. "This great department, in my view, was little more than a dressmaking school."

The biggest problem was the Designer Critic program, a yearlong senior-thesis project in which groups of students were paired with famous designers, such as Donna Karan and Marc Jacobs, to create a single line. At year's end, students debuted their work at an industry fashion show attended by everyone from Vogue editor Anna Wintour to buyers from Bloomingdale's. It was the pinnacle of the Parsons fashion experience, and to Gunn, it represented everything that was broken. Instead of challenging students to cultivate an original design point of view, their big-name mentors were directing all the creative decisions. For the most part, the school was training its future designers to become drones.

In the winter of 2000, Gunn told Randy Swearer, then dean of Parsons, that they had a crisis on their hands, and Gunn refused to allow another graduating class to endure the Designer Critic program. He advised that the fashion department needed a leader dedicated to overhauling the entire program at its guts. Then he suggested that he was the person to do it. Swearer agreed, and the next year, Gunn was named chair.

Gunn scaled back the Designer Critic program to one semester during junior year and announced a new senior thesis in which every student would design an entire collection — and only the best work would make the end-of-year show. Parsons's entrenched faculty bristled, and it wasn't long before Gunn got a call from Swearer, summoning him to his office. When he arrived, three of the Designer Critics along with Stan Herman, president for more than a decade of the powerful Council of Fashion Designers of America, were waiting. "They were there to tell the dean he had to get rid of me," Gunn says. "That this was a disaster for both Parsons and the industry."

To the entire room's surprise, Swearer told the group he backed Gunn 100%. "It was very clear that Tim understood what needed to be done and, most important, was willing to do it," says Swearer. "He had the opportunity to completely succeed or fail."

At first, it looked like the latter. On the day of the first show under Gunn's revamped program, he remembers the CFDA's Herman issuing an ominous warning: "I hope you have a new gig lined up because I'm afraid this is over for you." Not quite. For the first time in Gunn's experience at Parsons, the students received a standing ovation. And the press actually wrote about the students' designs rather than who showed up at the after-party.

The wisdom of Gunn's transformation was evident in the work of students Jack McCollough and Lazaro Hernandez. Earlier that year, the two had asked their academic advisers if they could pair up together on a line and were told no — that wasn't how things were done. The students appealed to Gunn, who unilaterally instituted a new policy: Double the number of pieces in a collection and collaboration is fine. After all, that's how a number of successful designers work. "The moment those boys presented the collection for the show," says Herman, "that changed my perception of the school. It was far from schoolwork." Julie Gilhart, the fashion director at Barneys New York, immediately bought the collection. After several months of successful sales, McCollough and Hernandez found a backer, and today, Proenza Schouler — the team's nom de couture — has become arguably the most celebrated label to emerge from New York in recent years.

"Tim's influence at Parsons was a turning point," says designer Diane von Furstenberg, who became CFDA president in 2006. "It put the school on another level." Donna Karan credits Gunn with infusing the program with an intellectual rigor that blends artistry with commerce. "He brought the real world into the school," she says. Over the next two years, Henri Bendel and Saks Fifth Avenue picked up student lines. Since 1999, the school's enrollment has nearly doubled.

Along with Parsons's metamorphosis came Gunn's. "There was always this sense that Tim was incomplete professionally," Swearer says. Gunn, the gay, stuttering son of an FBI agent ("My most painful memories were at those father-son football games," he says), had pursued a number of creative passions in his earlier years — concert pianist, architect, writer. But it was only years later at Parsons, after decades as a middle-tier administrator, that Gunn's calling was revealed. "Tim found out he was an entrepreneur," Swearer says. "He was like a genie in a bottle who didn't know he was in a bottle. Once he was out, it was just a brand-new Tim Gunn."

"Tim was like a genie in a bottle who didn't know he was in a bottle. Once out, it was a brand-new Tim Gunn."

Gunn received a call in January of 2004 from Jane Lipsitz, a producer working with Miramax and the Weinstein Co. Heidi Klum had pitched Harvey Weinstein an idea for a reality-TV show featuring aspiring fashion designers, and they had sold it to Bravo. Lipsitz was looking for an industry consultant to help them behind the scenes. Gunn was skeptical: "I said, 'Fashion reality?' I figured they'd be pulling twentysomethings off the street going, 'Hey, do you want to be a fashion designer?' " But when he found out the producers had done Project Greenlight, a canceled HBO show he admired about amateur filmmakers, he signed on.

After several months of working with Gunn, Lipsitz decided he belonged onscreen. "We thought he could be a conduit between the fashion world and the average person at home," she says. Gunn was flattered, but Bravo took convincing. Despite his polished wardrobe, Gunn was an unconventional choice for a reality-TV personality. One colleague described his reserved affect as more "botany teacher in a high school in the Midwest" than style impresario. Eventually, though, Bravo warmed to the idea, and Parsons, where Gunn remained as chair, became the backdrop for the show.

The first three episodes of Project Runway bombed. The show had debuted right before Christmas in 2004, but despite the poor response, Bravo believed there was an audience out there for it. As a last ditch effort, the network decided to broadcast a rerun marathon over the holidays. By the time episode four aired during the second week in January, viewership had skyrocketed. The first season got an Emmy nod, and its cast of dysfunctional designers and Klum's "auf Wiedersehen," became instant pop-culture fixtures. But it was Gunn — with his schoolmarm critiques, tough love, and verbal agility ("It's looking very happy hands at home granny circle," he cautioned one designer. "Resolve it.") — who became the breakout star. "You can tell he's a teacher," said a fortyish female fan from Queens, as she waited in line to see Gunn on The Daily Show. "He never talks down to people; he encourages them." Adds Runway's Klum: "Tim really cares about the designers. The audience loves him because they sense that."

Two years after the Runway debut, Gunn spent the Christmas holiday agonizing over McComb's job offer. Gunn was intrigued but intimidated: The ills of Liz Claiborne made his restructuring of Parsons seem like a weekend of crocheting. Besides, he wasn't looking for a new job — he assumed he'd retire from academia in another 15 years. At the same time, Gunn recognized that the Liz Claiborne gig could make him a player in an industry he had watched from the sidelines for his entire career. Plus, there were his own financial interests to consider. "People think I'm getting rich off of Project Runway," he confides. But "if I didn't have a day job, I'd have to live at the YMCA!"

In January 2007, Gunn met McComb for sushi in the Bryant Park Hotel. He told the CEO that he'd quit Parsons and take the chief creative officer job on one condition: that he wouldn't have to dial back on his celebrity extracurriculars. "I didn't have to think about it," McComb says. "I told him I wouldn't want him to give it up."

Gunn has spent his first year trying to figure out exactly what is wrong with the company at the design level and devising a plan to rebuild morale among the 200 designers whose creativity had been bled dry by years of bottom-line pressure. (At one point, Gunn gathered the designers for the DKNY Jeans brand and told them to design without considering price: " 'Bring us the most irresistible top you can conceive of,' " he recalls announcing. "The looks on their faces were as if they had been let out of jail.") He's also investing in the most-advanced technical tools for his designers and is working to implement a design philosophy that unites the company's disparate labels.

Gunn's other critical role is talent acquisition. He recruited John Bartlett as creative director for the Claiborne menswear line, and when executive vice president Dave McTague suggested hiring Mizrahi, Gunn enthusiastically supported it. Drawing on a connection from his Parsons days, Gunn also gave McComb an assist during negotiations with Narciso Rodriguez. Rodriguez (maker of Carolyn Bessette Kennedy's wedding dress) had been on the brink of bankruptcy, a common enough fate in the fashion world, and had called Vogue's Anna Wintour pleading for help. She suggested Liz Claiborne and its new CEO. Rodriguez, who had supported Gunn during the Parsons insurrection, had concerns about joining a flagging behemoth, but Gunn reassured him and helped clinch the deal. "Tim's an influence builder, and he's very successful in changing people's minds," says McComb, who now has another legitimate name in his stable (not to mention the goodwill of Wintour, the most powerful woman in fashion).

The showroom on the 14th floor of the Liz Claiborne headquarters is stark white. Glass vases filled with fresh limes and lemons are strategically stationed throughout the airy room, along with the new spring collection. Gunn is taking a last tour before he's off to the tents at Fashion Week, where he'll be filming with the Project Runway designers as they show their lines for the season finale. His office will sit empty for a week while he's across the street at Parsons, shooting the rest of the episode.

Gripping a mustard-colored crinkled-patent-leather coat, Gunn argues that McComb's impact won't be fully realized until Mizrahi unveils his first collection for the company in spring 2009. He notes that Mizrahi's name will also eventually appear on the label, next to the founder's. Gunn says, "In this climate today, consumers like identifying a brand with a person." (Mizrahi is restricted from talking about his Liz Claiborne plans until his contract with Target expires later this year.)

McComb's pop-culture tilt is a bold gambit for a company desperate for relevance.

McComb's penchant for fashion personalities is a potentially shrewd gambit for a company desperate for visibility and relevance. Claiborne stock got a bump from the Mizrahi news: A week after the announcement, it was up 25%, adding $400 million in shareholder value (though much of that evaporated within a few weeks, after the earnings disappointment was announced). Still, McComb's celebrity strategy has consequences. Although Gunn started at the company in March 2007, his office has been largely vacant. Last year, he was on the road all of April, half of May, all of June and July, and half of August filming Project Runway and his new show Guide to Style, and doing a book tour. "I will tell you bluntly: It created some not-so-nice stuff around here for me," says Gunn. "There was this cynicism that Bill bought a personality."

"I will tell you bluntly: It created some not-so-nice stuff around here. There was this cynicism that Bill bought a personality."

McComb scoffs at the idea that Gunn is little more than a glorified spokesperson, "This isn't about his being a hawker for us." Not that Gunn isn't good at it: Last fall, McTague, a McComb recruit from Nike, hauled Gunn along on a three-month cross-country tour "to help me reinvigorate our connection to women shopping at Dillard's, Macy's, and Belk." Gunn channeled his best Guide to Style shtick via video, pumping up floor associates at the major department stores. But what made the biggest splash were the parking-lot fashion shows at malls in locales such as Little Rock, Arkansas, and Dallas. Crowds of 400 or more waited in line for hours — and probably not to see Liz's newest sweater sets. "Tim's other [celebrity] world is in a watertight container, and I would never pollute it, never take advantage of it, and never ask for favors personally or corporately," McComb insists. But McComb also knows that Gunn is the kind of guy who cares about his new company the way he did about his students — he'll do anything for it.

Still, the road ahead is not pretty. McComb has been executing a massive company reconstruction. He has disbanded an entire level of presidents; licensed, sold, or shut down 14 of the company's 46 brands; and reorganized the remaining businesses into distinct retail and wholesale categories. So far, the financial results have been dismal. He intends to flog the retail brands with the most potential — Kate Spade, Lucky Jeans, and Juicy Couture, in his view — by opening 300 new stores for the three labels in the next two years, hoping they'll help drive $3 billion of the overall business. And to his credit, sales at Juicy stores opened more than a year are up 25%. Both the internal and external models McComb is pursuing — a flatter organizational structure and a "Coach model" of retail pitching "affordable luxury" to the trading-up crowd — are gauged to make the company leaner and give it a tighter focus.

His biggest challenge may be the Liz Claiborne brand, which represents 20% of overall revenues. To win over new retail customers, he first has the daunting task of regaining the loyalty of the department stores, the brand's principal distributors, which have come to regard it as a fusty, soulless collection of basics. What's more, morale under McComb is hardly soaring: He has cut 800 jobs, and it's uncertain how patient his board will be with a plan that has yet to deliver results. The stock is down more than 50% on his watch.

Mizrahi brings legitimate wattage to Liz Claiborne. He earned Target more than $300 million at retail annually and still has his own Bergdorf Goodman couture line, making him perhaps McComb's best draw for the boomer woman who refuses to pull on the mom jeans. In other ways, though, Mizrahi is a wild card. Back in 1998, the outspoken designer couldn't keep his own label afloat, and his backer, Chanel, killed it. Duplicating his Target success at Macy's will be considerably harder. "Now he's trying to bring [his line] into a museum that has a lot of other artwork," says Marshal Cohen, a retail analyst at NPD Group. "Will he be able to stand out? And will Liz be willing to go that extreme?"

Gunn, sounding less like his Runway persona and ever more the entrepreneur, is optimistic. "I honestly think that in the not-too-distant future, this company will establish new paradigms of operations, the likes of which I don't think this industry has ever seen." Then he adds, "I think we're going to be a Harvard Business School case study." Here's hoping it's not a postmortem.

A version of this article appeared in the April 2008 issue of Fast Company magazine.

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I think this article is a perfect example of how catalytic leadership can change and transform an institution or industry without changing the catalyst. McComb's decision to pursue Gunn to serve in the position of chief creative officer of a descending business provides a catalyst for change in an industry constantly in a state of creative flux. While change may be a constant, the kind of change needed by McComb was the kind that works! Tim Gunn's new found fame as a television personality is but a small part of the kind of change and leadership he brings to any endeavor. It's about creating and recreating vision and value that seem to elude every organization and industry that aspire to be on top only to be replaced by the next big thing. Tim Gunn's reign as chief creative officer may bring the kind of change that Liz Claiborne needs to stay on top in the industry but the real genius of his tenure will be the kind of leadership he embodies with his boss, McComb. Simply restoring or resurrecting Liz Claiborne may not be enough, it may just need to be recreated in a new image that exceeds the old. Will McComb and Gunn be able to provide that kind of change and leadership? Maybe, but serving as the catalysts for change is a good place to start. Long Live Good Leadership!